Pakistan records 60% surge in tax return filers, reaching 7.2 million

ISLAMABAD: Pakistan has recorded a significant rise in tax compliance, with the number of income tax return filers increasing by 60%, from 4.5 million to over 7.2 million.

The development was disclosed during a high-level review meeting on Federal Board of Revenue (FBR) reforms, chaired by Prime Minister Muhammad Shehbaz Sharif on Wednesday.

The prime minister lauded the progress achieved so far, emphasizing the need for sustained, time-bound efforts to modernize and digitize the tax system. Calling the improvements in the tax machinery “encouraging,” he stressed that reforms must lead to a sustainable, transparent, and facilitative system aligned with international standards.

“We’ve reached key milestones, but consistent and dedicated efforts are still required,” the prime minister said.

He directed the FBR to expedite its digital transformation, restructure its digital wing with a clear implementation roadmap, and strengthen enforcement to curb the informal economy. He also highlighted the importance of broad-based stakeholder engagement, particularly with the business community, traders, and taxpayers.

The prime minister reiterated that tax reforms should not only enhance revenue collection but also ease the burden on ordinary citizens.

The meeting was briefed that as a result of the reforms and enforcement measures, the tax-to-GDP ratio saw a historic rise of 1.5% in FY2025 compared to FY2024. Moreover, the number of income tax return filers surged from 4.5 million in 2024 to over 7.2 million by June 30, 2025.

FBR officials reported significant progress under the faceless customs clearance system, which increased revenue and is expected to reduce clearance times from 52 hours to just 12 hours within the next three months.

In the retail sector, tax collection grew by Rs455 billion year-on-year, driven by enhanced integration of point-of-sale (POS) systems and tighter enforcement mechanisms.

The meeting was also informed that reforms had led to a 2.16% reduction in the weighted average tariff on imports, thereby lowering raw material costs and benefiting local industries.

To enhance the transparency of the faceless system, a new mechanism has been introduced, enabling case hearings through video link for timely resolution.

The Prime Minister welcomed proposals for further reforms and directed officials to submit a time-bound plan with actionable targets by next week. He also appreciated the efforts of FBR officials and officers involved in the reform process.

 

Federal Ministers Attaullah Tarar, Ahad Cheema, Azam Nazeer Tarar, Chairman FBR, and senior officials were present during the meeting.